Neoplastic development of Syrian hamster embryo (SHE) cells is a multistep process. However, the number of steps and the genes or changes involved are unknown. SHE cells transfected with v-Ha-ras DNA plus v-myc DNA formed tumors with short latency periods. To determine whether activation of ras plus myc was sufficient for tumorigenicity, we performed cytogenetic analyses of tumors formed following transfection. Tumors (ras/myc-T) induced by v-Ha-ras plus v-myc oncogenes were monoclonal and had a nonrandom chromosome change, monosomy of chromosome 15. Thus, an additional change, loss of chromosome 15, is required or advantageous for tumorigenicity induced by v-HA-ras plus v-myc oncogenes. To determine if normal cellular factors or genes can regulate the phenotypic expression of tumorigenicity and/or oncogenes, cell-cell hybrids between neoplastic and nontumorigenic hamster cells were isolated. Hybrids between ras/myc tumor cells and SHE cells were nontumorigenic and failed to grow in agar. These suppressed hybrids still expressed the ras and myc oncogenes. After several passages, variants arose in the hybrid cells which re-expressed tumorigenicity and anchorage-independence. Karyotypic analysis of the suppressed and re-expressed hybrids showed a non-random loss of chromosome 15 associated with re-expression of tumorigenicity. Hybrids between SHE cells and chemically transformed hamster cell lines were also suppressed for tumorigenicity. Carcinogen treatment of SHE cells induced immortal cells as an early step in a multistep, neoplastic transformation. At early passages immortal cells suppressed tumorigenicity of fully transformed cells. At later passages the cells lost the ability to suppress tumorigenicity in cell hybrids but were still not completely transformed. Cells which had lost the tumor suppression function were readily converted to tumorigenicity by a transforming oncogene (eg ras) whereas cells which retained this function were resistant to neoplatic transformation. These results suggest that chemically induced neoplastic progression of Syrian hamster embryo cells involves at least three steps: (1) induction of immortality; (2) activation of a transforming oncogene; and (3) loss of a tumor suppression function.